When equilibrium GDP falls below potential GDP, an inflationary gap exists
a. True
b. False
Indicate whether the statement is true or false
False
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In the above figure, if the natural monopoly is regulated with an average cost pricing rule and the firm does not inflate its costs, then consumer surplus will be
A) $192 million. B) $108 million. C) $216 million. D) $60 million.
Refer to Figure 14.3. Suppose the economy is initially at long-run equilibrium and the Fed increases the target inflation rate, and to hit this rate, it must reduce the real interest rate. This is best represented by an initial movement from
A) point A to point B. B) point A to point D. C) point A to point C. D) point B to point C.
What department of the federal government issues public debt and in what form?
a. Department of Commerce issues the debt and the debt is in the form of Fed bonds, Fed bills, and Fed notes b. The Federal Reserve issues the debt and the debt is in the form of Treasury bonds, Treasury bills, and Treasury notes c. The Federal Reserve issues the debt and the debt is in the form of Fed bonds, Fed bills, and Fed notes d. Department of the Treasury issues the debt and the debt is in the form of Treasury bonds, Treasury bills, and Treasury notes e. Department of Commerce issues the debt and the debt is in the form of its own bonds, bills, and notes
If currency depreciates:
a. net exports rise and the aggregate demand curve shifts inward b. net exports rise and the aggregate demand curve shifts outward c. net exports fall and the aggregate demand curve shifts inward d. net exports fall and the aggregate demand curve shifts outward